Oil prices mixed after inventory-fueled spike

Oil prices mixed after inventory-fueled spike

Oil prices mixed after inventory-fueled spike

Oil prices rose on Thursday, steadying after losses over the past two days from a surprise increase in US crude inventories and renewed concerns over trade friction between the USA and China, Reuters reports.

According to two officials, the USA hasn't been able to persuade China to reduce Iranian oil purchases, but Beijing has reportedly agreed not to increase its oil imports from Iran, Bloomberg reports.

Brent crude futures were last down 33 cents at $72.06 a barrel by 12:00pm GMT, while United States crude futures fell 55 cents to $67.11.

On Tuesday, data released by the American Petroleum Institute showed USA crude stockpiles to have risen by 5.59 million barrels in the week, compared to analyst expectations for a 2.8 million-barrel drawdown.

Saudi Arabia's production increased by 230,000 barrels a day in July to 10.65 million barrels per day.

"Venezuela's ticking time bomb together with the return of Iran's oil industry to the sanctions era has all the makings for a major supply shock", Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note published Friday.

"Oil is holding up reasonably well".

Iran receives more airplanes ahead of renewed U.S. sanctions
If the USA wants negotiations, it should stop pressures and sanctions, Qasemi was quoted as saying by official IRNA news agency. It said this was part of a pre-planned plot by the US, Israel and Saudi Arabia to exploit economic tensions inside Iran.

After the market closed Tuesday, the American Petroleum Institute reported domestic crude oil inventories swelled by 5.6 million barrels last week, compared to a draw forecast by S&P Global Platts.

Additionally, Russia appears to have increased its production in line with OPEC's decision in late June to increase its output, with its crude and condensate production increasing 1.4% last month to 11.215 million b/d, the energy ministry said yesterday. "A lot of this is the risk premium priced in for Iran and when do we start seeing an impact on supply there", ING commodities strategist Warren Patterson said.

Despite the decline, China "continues to hold the mantle as the leading Asian destination for USA crude", said the firm's commodity research director, Matt Smith. "We could even see light sweet Nigerian barrels being displaced from India, and heading to China instead", he added.

Oil prices are also being pressured by concern that global trade tensions could crimp economic growth.

"A clear definition around the macros is what the market is looking for and until we get that, it is likely to be volatile in the range", said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney.

Russian oil production last month was on average above the level Moscow promised following the Organization of the Petroleum Exporting Countries and non-OPEC meeting in June, energy minister Alexander Novak indicated on Wednesday.

The kingdom has been under acute pressure from President Donald Trump to open the taps as he chokes off exports from Saudi's political rival, Iran. The market expected 1.3 million barrels of gasoline draw.

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